1. Point 15 Inventory Cost(2): First-In, First-Out (FIFO) The first-in, first-out (FIFO) cost flow assumption assumes that the goods that were purchased the earliest are the first ones to be sold.

2.  We assume that Fraser Valley Electronics has the following information for one of its products, a Z202 Astro Condenser:

3.  With FIFO, we are therefore assuming that the most recent purchases are still in inventory.

4. The cost flow assumption—FIFO, in this case—always indicates the order of selling. That is, with FIFO, the order in which the goods are assumed to be sold is first-in, first-out.

5.  Once the cost of the ending inventory is determined, the cost of goods sold is calculated by subtracting the cost of the ending inventory (the cost of the goods not sold) from the cost of the goods available for sale.

6. The accounting records of Cookie Cutters Company show the following data:  Beginning inventory 4,000 units at $3  Purchases 6,000 units at $4  Sales8,000 units at $8 Determine the cost of goods sold under a periodic inventory system using FIFO. Do It

7. 两种方法： （ 1 ）倒算法：  FIFO ending inventory: 2,000 × $4 = $8,000  FIFO cost of goods sold: $36,000 − $8,000 = $28,000 （ 2 ）正算法： Cost of goods sold (COGS) proof: (4,000 × $3) + (4,000 × $4) = $28,000